The DAX index gained ground on Thursday, closing at 24,154 points, which represented a 0.4 percent increase compared to the previous day’s close. After a subdued start, the index managed to build up gains until the early morning, although it later shed a significant portion of those gains. Andreas Lipkow, Chief Market Analyst at CMC Markets, commented that investors in Frankfurt were left feeling somewhat disappointed, having to follow the record highs set in New York and Tokyo. He noted that the positive momentum failed to fully transfer over to the DAX, citing excessive concern over the negative impact of persistently high crude oil prices on Germany’s economic development.
Although the current earnings reporting season shows several positive outcomes when viewed in retrospect, Lipkow pointed out warning signs. For instance, high energy prices are already affecting the consumer goods sector. He added that the stock market remains stable as long as there are no negative reports from the Middle East. Nevertheless, the future development of the inflation rate remains uncertain in the coming months, largely due to the sharply increased crude oil prices. Furthermore, the ongoing negotiation situation between the US and Iran remains an unpredictable risk for many investors.
Heading into the close, shares of Brenntag, Scout 24, Zalando, and SAP topped the list of gains in Frankfurt. Meanwhile, the stocks of Qiagen and Merck ranked near the bottom of the performance board.
In other news, the price of natural gas increased; a megawatt-hour (MWh) of gas for delivery in May cost 42 Euros, which is three percent higher than the previous day. If this price level remains permanent, it implies a consumer cost of at least around nine to eleven cents per kilowatt-hour (kWh), inclusive of ancillary costs and taxes.
Oil prices also rose. On Thursday afternoon, around 5 PM German time, a barrel of Brent crude oil cost $97.96, marking a 3.2 percent increase from the close of the prior trading day.
Regarding currencies, the European community’s currency was slightly weaker on Thursday afternoon: one Euro cost $1.1776, making the dollar worth 0.8492 Euros.